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Tech giants should pay for what they use

As the country cautiously awakens from its economic coma, businesses are struggling to unscramble the new rules of customer engagement.

The protocols of social distancing will increase the already high anxiety among consumers worried over their physical and financial well-being. The road to recovery in the new abnormal will be a long and uncertain path. Retail outlets and industries that were in decline before the pandemic must rethink their business models or perish. Nowhere is that truer than the news business.

The coronavirus pandemic drastically curtailed media advertising and put a serious hurt on news operations. The Day experienced a double-digit advertising decline as a pandemic fallout in April over 2019.

The plague greatly accelerated a two-decade retreat of newspaper advertising revenues that were diverted to digital platforms, primarily Google and Facebook. The New York Times estimates that 36,000 American journalists have suffered layoffs, furloughs or wage reductions since the pandemic struck.

But the pandemic also reawakened in Americans the need for in-depth, balanced, credible reporting that trusted local news outlets provide. Newspapers that have maintained newsroom staffs and journalistic standards are reporting readership increases. The Day, which received a federal small business loan under the Paycheck Protection Program, is part of that trend. Day subscriptions are up on both print and digital platforms since the pandemic outbreak.

Publishers have long viewed Google and Facebook as predators who have devoured both their advertising revenues and news content. Publishers have had no success until now convincing the technology giants to pay a license fee for their news content. Now, some national governments are recognizing the threat to journalism in their countries and are taking the digital platforms to task.

Last month, Australia became the first nation to impose regulations on Google and Facebook that force them to negotiate payments with publishers. In France, regulators are writing rules that will command internet platforms come to terms and compensate publishers. These precedents could provide news organizations a much-needed lifeline. Germany is studying similar legislation to help that country’s news organizations. Publishers in Canada, Ireland and Malaysia are pressing their governments for help.

In the United States, where lobbyists are strong and regulators are relaxed, Google and Facebook have stifled attempts to compensate publishers. However, the politics here may be changing.

The News Media Alliance, an association representing 2,000 domestic print and digital news organizations, is seeking an anti-trust exemption from Congress to allow its publishers to use the alliance to negotiate licensing fees as one bloc. The effort is gaining traction among some Democrats and Republicans, who are focusing increased critical attention on the two internet behemoths.

The Journalism Competition and Preservation Act was introduced in the House of Representatives on April 3 by David Cicilline (D-RI) and Doug Collins (R-GA). The bill creates a 48-month anti-trust exemption for publishers to band together and negotiate collectively for licensing fees with Google and Facebook. Rep. Joe Courtney, the Democrat representing Connecticut’s 2nd Congressional District, is a co-sponsor.

Facebook, sensing the political shift, is showing signs of an attitude adjustment. It has begun entering selective financial arrangements for payments to individual publishers for its Facebook News initiative. Facebook has struck three-year licensing deals with a dozen national news outlets. Google, reluctantly, also is entering early discussions with some publishers in France and the United States.

These are good signs that the tech giants are acknowledging some responsibility to underwrite the cost of producing credible journalism. The Journalism Competition and Preservation Act also is a step in the right direction.

However, we would like to see more teeth in the legislation. Congress should follow the lead of Australia and France and mandate that the technology giants support journalism and a free press by entering licensing agreements with media outlets at both the national and local level. There is precedent for congressional action with the cable television services that pay local television stations and broadcast networks retransmission fees.

If similar licensing fees were paid to publishers for their local content, it would help stabilize the domestic news industry. It would preserve journalism jobs and secure the free flow of local news coverage. It would help assure that more Americans are better informed.

 

 

The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.

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